A deep dive into Personal Finance and everything it entails.
Making money is only half the battle; the other half is planning your finance to reap the most benefits. You need a strategic financial plan to prepare for your future, handle emergencies, and create more wealth. While you might have heard of the term ‘personal finance’, the exact nature of this concept can be ambiguous. To ensure you make informed decisions about financial management, read on to learn about personal finance.
Personal finance is an umbrella term that includes concepts like money management, saving and investing, tax planning, retirement planning, and much more. It also includes budgeting, mortgages, insurance, and other banking practices. Essentially, you can boil down the personal finance meaning to include products and services that empower you to make informed personal financial decisions to meet your goals.
To execute successful financial planning, you should determine your monetary objectives. To this end, you must define your short and long-term financial goals. For instance, you might require funds for the short term to make a large purchase or plan a wedding. You also need to arrange for long-term prospects like buying a house or saving for retirement. To make plans for financial management, you need to know your goals along with your income, expenses, and constraints. Once you consider these factors, you can build a strategy that will help your sort out your personal finance.
Personal finance helps you become financially literate. Financial literacy is a set of skills that can help you distinguish between good and bad financial advice and assist you in making better decisions. Yet, since your school and college syllabus does not cover money management, you can learn the basics through free online courses, read up articles, watch financial education videos and more.
Further, personal finance also helps you prepare for the contingencies that lie ahead in life. While no approach can be foolproof, with personal finance-based planning, you are more prepared to meet any challenges in the future. Simple, practical steps like managing your cash flow effectively, paying income taxes, opting for beneficial investment instruments like mutual funds, tax-saving instruments etc., can prove helpful.
At digibank, you can avail of various products and services to plan your personal finances. With a host of services to suit your needs, you can also access financial management investment products and solutions through your digibank mobile banking app and internet banking platform.
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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.